Correlation Between LNA Sante and Bastide Le

Can any of the company-specific risk be diversified away by investing in both LNA Sante and Bastide Le at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LNA Sante and Bastide Le into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LNA Sante SA and Bastide Le Confort, you can compare the effects of market volatilities on LNA Sante and Bastide Le and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in LNA Sante with a short position of Bastide Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of LNA Sante and Bastide Le.

Diversification Opportunities for LNA Sante and Bastide Le

0.58

Correlation Coefficient

LNA Sante  Bastide Le

Very weak diversification

The 3 months correlation between LNA and Bastide is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding LNA Sante SA and Bastide Le Confort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bastide Le Confort and LNA Sante is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on LNA Sante SA are associated (or correlated) with Bastide Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bastide Le Confort has no effect on the direction of LNA Sante i.e., LNA Sante and Bastide Le go up and down completely randomly.

Pair Corralation between LNA Sante and Bastide Le

Assuming the 90 days trading horizon LNA Sante is expected to generate 3.11 times less return on investment than Bastide Le. But when comparing it to its historical volatility, LNA Sante SA is 1.19 times less risky than Bastide Le. It trades about 0.07 of its potential returns per unit of risk. Bastide Le Confort is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2,100  in Bastide Le Confort on December 1, 2024 and sell it today you would earn a total of  550.00  from holding Bastide Le Confort or generate 26.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

LNA Sante SA  vs.  Bastide Le Confort

LNA Sante SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LNA Sante SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LNA Sante may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bastide Le Confort

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bastide Le Confort are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Bastide Le sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LNA Sante and Bastide Le

The main advantage of trading using opposite LNA Sante and Bastide Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LNA Sante position performs unexpectedly, Bastide Le can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bastide Le will offset losses from the drop in Bastide Le's long position.

The idea behind LNA Sante SA and Bastide Le Confort pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.